FocusEU biodiesel producers eye growing Argentina exports

13 October 2009 21:19  [Source: ICIS news]

Europe eyes Argentina biodieselBy Judith Taylor

HOUSTON (ICIS news)--EU biodiesel producers are closely watching Argentina’s growing exports of the biofuel, industry sources said on Tuesday.

Argentina’s burgeoning production has filled the export space left when the EU levied anti-dumping duties and tariffs on US biodiesel in April, sources said.

US traders said as much as 120,000 tonnes/month of soy-based biodiesel had moved from Argentina into Europe during the second quarter, going mainly into Amsterdam-Rotterdam-Antwerp (ARA) and headed for further distribution across Europe.

“Europe needs low cost providers like Latin America,” said one trader whose Argentina-based company was known to be exporting biodiesel.

The European Commission (EC) voted in March to support temporary duties imposed on US biodiesel following complaints from the European Biodiesel Board (EBB). The EC extended the tariffs, ranging from €213-409/tonne ($315-605/tonne), for five years starting in July.

Argentine refiners stepped up to fill the gap. The country’s producers exported more than 85,000 tonnes of biodiesel to Europe in April, according to the EBB, twenty times more than it had shipped the same month the year before.

The EBB is now considering its next step and is holding informal discussions with the European Commission (EC) trade board, said EBB spokeswoman Amadine Lacourt.

“It’s an ongoing discussion with our members and the EC to consider what is now happening in the market,” Lacourt said. “We do not see why Argentine biodiesel, when exported to EU, should have zero tariffs.”

The EBB may have a more difficult time making a complaint against biodiesel from Argentine than from the US, where the government directly subsidised the fuel.

Argentina has an array of differential excise taxes in place on its biodiesel exports, according to Camara Argentina de Energias Renovables (CADER), the Argentinian Chamber for Renewable Energy.

There is a Value-Added Tax (VAT), somewhat like a sales tax, that is levied on raw materials when purchased to make biodiesel, according to CADER reports. The VAT is reimbursed by the government once the final product is exported.

The VAT is one item being looked upon by the EBB and the EC as a potential subject for investigation as a subsidy for Argentina’s biodiesel producers.

US-based traders and several former biodiesel producers who preferred to not be named said the EC could find it difficult to prove such differential excise taxes are countervailing duties as was done in the case of the US subsidy.

US players said it appeared unlikely a case could be made that would put Argentina’s biodiesel exports into a situation like that applied to the US.

“You can’t call it a subsidy because it isn’t a direct subsidy,” one former US producer said.

The EBB was also examining Argentina’s status as a “developing country” as well as displaying concerns that Argentina could form a ‘diversion point’ for US imports to Europe, thereby circumventing the imposed tariffs.

($1 = €0.68)

Additional reporting by Ben Lefebvre

For more information on biodiesel, visit ICIS chemical intelligence
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